If your customers pay on 30, 60 or 90 day terms, your cash can be stuck in unpaid invoices. Invoice factoring turns those invoices into working capital now, so slow-paying customers do not slow your business down. No hard credit pull to start.
What this means: Get cash now for invoices your customers have not paid yet.
New to these words? See the glossary. Every decision and every term comes from the lender.
With factoring, you sell eligible unpaid invoices to a factoring company. The factor typically advances a large portion of the invoice value up front. When your customer pays the invoice, the factor releases the remaining balance to you, minus its fee. The details, including advance amounts and fees, vary by factoring company.
Some factoring arrangements are notification based, meaning your customer pays the factor directly. Others work differently. We help you understand how each structure affects your customer relationships before you decide.
Factoring is a natural fit for businesses that invoice other businesses or government agencies: trucking and logistics, staffing, manufacturing, wholesale and distribution, construction subcontractors, and professional services. If you sell mostly to consumers with card payments, working capital or a line of credit is usually a better place to look.
Because factoring depends heavily on the creditworthiness of your customers, it can be an option even when your own business is young or your credit profile is still developing.
Factoring is not a loan in the traditional sense. You are converting an asset you already have, your receivables, into cash. That makes it different from a revenue-based line of credit, which is credit you draw and repay, and different from a merchant cash advance, which is based on future sales rather than existing invoices.
Many owners use factoring to cover payroll and supplies while waiting for large customers to pay, or to take on bigger contracts without running short in the meantime.
Factoring companies usually ask for an accounts receivable aging report, copies of invoices, information about your customers, a short application and ID. Clean invoicing and clear records help a lot.
When comparing offers, look at the advance amount, the fee structure, how long the factor waits for payment, whether you must factor all invoices or can choose, and what happens if a customer does not pay.
We explain factoring, help you compare structures, and connect you with partners that work in your industry. You are never obligated to accept an offer. When it feels right, start your path.
Compare line of credit options side by side.
Short-term funds for payroll, inventory, marketing or a slow season. Often repaid from future sales.
Reusable credit sized around your business deposits and revenue.
Credit shapes the options open to you. See how lenders look at it, check where you stand and find help if you need it.
Factoring is usually the sale of receivables rather than a loan. The agreement explains the structure.
In many arrangements customers pay the factor directly. Some structures differ, and we will explain them.
Often yes, since factors focus heavily on the creditworthiness of your customers.
Some factors allow you to choose invoices, while others require a set volume. It varies by company.
Applying is free and takes a few minutes. Here is what to expect, step by step.
A short online application, or a call with our team. About the business, what the money is for and how much you have in mind.
My team and I review what you shared and call or text you, usually to ask a few questions and explain what we see.
Usually recent bank statements and your own credit report through our IdentityIQ link. No hard credit pull to start.
We shop your file with lending partners and walk you through any offers, including the total payback.
Take an offer or don't. There is never pressure, and you can stop at any point.
Timing depends on the option and the lender. We'll give you honest expectations once we know your situation. Rather talk first? Book a free 20-minute call.
A short, free application. No hard credit pull to start.
No pressure and no hard credit pulls to start. Tell us where your business stands, and we'll walk the options together.
